As part of a drive to strengthen the private sector and raise scarce hard currency, Egypt has inked contracts to sell stakes in state assets for a total of $1.9 billion, according to Tuesday’s statement from Prime Minister Mostafa Madbouly.
The share sales are considered essential to Egypt’s chances of relieving persistent pressure on the Egyptian pound, attracting desperately needed funds, and starting economic reforms under a $3 billion IMF loan plan.
Madbouly stated that out of the $1.9 billion, $1.65 billion would be paid in foreign currency.
By the end of June, the government hoped to raise $2 billion from share sales, but delays have hampered this goal and reduced the value of the pound on the black market. At the official exchange rate, the value of the pound relative to the dollar has decreased by approximately 50% since early last year, and inflation is at all-time highs.
According to Planning Minister Hala el-Said, the new contracts entail the sale of minority stakes in three companies in the oil and petrochemical sector to Abu Dhabi’s sovereign wealth fund ADQ for $800 million, the offering of capital in a portfolio of hotels to raise $700 million, and a deal for a 31% stake in the steel company Ezz Dekheila worth $241 million.
After a press conference in which key members of the cabinet were present, Said told reporters that “these are all done and binding.”
ICON, the hospitality division of Egyptian real estate giant Talaat Mostafa, was given the stake in the hotels, which also comprise ancient buildings in Cairo, Alexandria, and Luxor, she added.
According to Madbouly, the government has sold holdings in nearly a quarter of the 32 state-owned businesses in which it had previously said it would do so, and it is prepared to sell stakes in additional businesses in the future.
He noted that Egypt anticipates a rise in its annual inflow of hard cash of $70 billion per year to $191 billion by 2026.
According to Said, sales of the military-owned Wataniya Petroleum and a Siemens (ENR1n.DE) power plant are among the deals the government anticipates concluding in the coming months. The Gabal El Zeit wind farm is another.
